Short Sales

A short sale is a sales procedure used when a property owner’s loan liability exceeds the associated properties current market value. This process means that the lender permits the current owner to sell the property and pay the net proceeds received from a buyer after deduction of closing costs.

Will I still owe the lender anything after the sale?

This all depends on your own bank’s policies. We have not as yet seen anyone pursued for any shortfall from a short sale transaction; however, this may well change in the future. We always suggest that you request from your lender confirmation in writing that they will not pursue any shortfall balance in future.

Why would a mortgage company / lender want to allow a short sale?

The answer is that a short sale often has an improved return on investment to the lender than if they proceed with a foreclosure. The average savings a lender sees from a short sale property compared with a foreclosure property will vary but industry insiders suggest that this can increase lender costs by over $15,000.  Additionally, if a lender agrees to the short sale route they are also often paid much earlier than a prolonged foreclosure process.

How would I find out if I qualify?

You should contact your lender directly to ask them if the short sale process is an option available to you.

What is the time frame for the process?

Short sales can vary from 30 days to 12 months plus and many factors will affect the actual time frame, including your bank’s response times as well as your own ability and motivation to complete and return any requirements for information your lender may have.

How do we establish an asking price?

Team Donovan will establish a fair market price to list the home. Listing the home at a correct price is crucial to ensure the highest possible chance of gaining short sale approval from your lender. Listing a home unrealistically will result in the bank declining an offer and further prolonging the entire process.

What is the cost for Team Donovan to conduct a short sale?

There is no cost to the seller for short sales. The closing costs (commissions, title company fees, H.O.A. fees, etc.) are usually covered from the buyer’s funds with the remaining funds being credited to your lender at closing/completion.

How can I aid in the success of my short sale?

In our experience, the more motivated you are as an owner the more chance you will have to conclude a sale in a timely manner. Banks are processing a huge number of short sale files and you as the loan holder need to stay active in the process. Being friendly, understanding, helpful and consistently in contact will increase considerably your chances of success.

Once an offer is received, we would suggest that you maintain contact 2 to 3 times a week. The longer the sale takes to conclude the more chance a buyer will get cold feet and back out.

I want to short sell my house, what now?

We strongly advise that you seek legal advice based on your own personal circumstances as we are neither attorneys nor accountants and therefore are unable to offer any specific legal, tax or loan advice. Should you decide to proceed, our role at Team Donovan is limited to finding a willing and able purchaser for your home to complete the sale. 

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